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Archive for John Stancil

Tax Effects Of A FEMA Disaster Declaration

If your county has been declared a FEMA disaster area due to the recent hurricanes, you have more time to file your tax returns and make certain tax payments. Individual and business income tax returns that previously received extensions to October 16 and September 15, respectively are now due January 31, 2018. Tax-exempt organizations who received an extension will have their return due date extended likewise.

In addition, any tax payment deadline of September 4 or later has been extended until January 31, 2018. This includes estimated quarterly payments for Third and fourth quarter 2017. Individual tax returns that were originally due April 18, 2017 and received a six-month extension are not eligible for the extended due date, as that payment was actually due in April, 2017.

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Don’t Count On A Hurricane For Tax Extension

The IRS has granted an extension of time to file 2016 income tax returns for individuals and businesses impacted by Hurricane Harvey. The new deadline is January 31, 2018. Eighteen Texas counties are included in this extension – Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria, and Wharton. Other counties could be added. In addition, if a taxpayer outside the designated area can demonstrate that records necessary to complete the return are located in the affected area, an extension may be granted.

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The IRS And Private Collectors

John Stancil

After failed attempts in the past, the Internal Revenue Service has engaged the services of four private-sector collection agencies. As most people are aware, there are numerous tax-related scams in today’s world. If you are contacted by someone who states they are attempting to collect a tax debt for the IRS, you need to know what to expect and how to determine if the individual is legitimate. Read more

When Hockey Meets the IRS

The United States Tax Court recently made a ruling that drew some fine lines about what constitutes a de minimis fringe benefit for employees. The IRS had sued the Boston Bruins Hockey Team, contending that meals served to players and others while attending away games was subject to the 50 percent limitation on the cost of meals provided to employees. It should be noted that this is a working-condition benefit and not taxable to the employees. The Bruins countered the IRS, stating that these meals met the qualifications of a de minimis benefit and were therefore fully deductible. The Tax Court sided with the Bruins, stating that the benefit was fully deductible. Read more

You Could be Taxed on that “Non-Taxable” Employee Benefit

A benefit frequently offered to employees is discounts on products or services that the company sells. Under the Internal Revenue Code, all benefits provided to an employee are taxable, unless they are specifically excluded from income or defers tax on the benefit.

One example of deferring tax on the benefit would be employer contributions to a pension plan for the employee. This is not subject to income tax at the time received, but is taxed then the employee begins making withdrawals from the plan upon retirement.

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Much Ado About Nothing? Court Rules On PTIN Lawsuit

John Stancil

The Preparer Taxpayer Identification Number (PTIN) was originated by the IRS in 1999 as a measure to protect the Social Security number identity of tax preparers. At that time, the IRS stated that preparers could use their SSN or apply for the free PTIN. The PTIN was apparently permanent, as it did not need to be renewed. And this was the status quo for 12 years. Read more

Nine Tax Code “Head Scratchers”

John Stancil

Having survived tax season for one more year, I was struck by how complex our tax code really is. I’ve been preparing taxes for over 40 years, yet I ran into several provisions that I had not previously encountered. I am fully aware that there is much wrong with the code, that there are some major overhauls needed. In the midst of all this complexity, it struck me that there are provisions in the code which are not big deals, but are head scratchers. Why are these things in the code? Eliminating them can go a long way toward helping the middle-class taxpayer.

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Misdeeds With Form 1023-EZ

John Stancil

When an organization wishes to become a tax-exempt organization eligible to accept tax deductible contributions from donors it is not sufficient that it be a non-profit organization. That, however, is the first step. Before the organization can be recognized by the IRS as a tax-exempt organization, it must file organization papers with the state as a non-profit corporation.

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“Where’s My Refund?” – IRS Changes

John Stancil

So you get all your tax information together early and go to your preparer so you can file your tax return early and get the refund quickly. Not so fast. Certain refunds will be delayed and will not be released by the IRS until February 15. This is due to a provision in the PATH Act, enacted by Congress in 2015, prohibiting the IRS from releasing certain refunds prior to February 15. This provision takes effect this year. Note that the 15th is the release date, so it will take a few more days for you to receive the refund.

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Rental Property Sales – A Simplified Look

John Stancil

When one has rental real estate, the sale of that property can have significant tax ramifications. Some of these are good, while others can create significant tax liabilities.

First, the good news. If there were losses that could not be deducted due to the passive activity rules, these losses may be deducted on Schedule E in the year of sale, assuming the property is sold in a taxable transaction.

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Safeguarding Form 4361

John Stancil

A minister who wishes to be exempt from social security/Medicare tax must file a Form 4361 with the IRS for approval. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the exemption on that basis.

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The Truth About Section 179 And Vehicles

John Stancil

I recently received a mailing from an American automobile company regarding the Section 179 deduction. The letter expressed some urgency to purchase a vehicle before the end of the year to get a large Section 179 deduction. While this is true, the letter left me with the impression that I needed to take action before December 31, 2016, or the deduction would be lost. What they stated was true. However, it is what was left unstated that concerns me.

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